2006 (3) TMI 511 - AT - Central Excise

Summary

Issues:
1. Demand of duty and penalties on various appellants under the Central Excise Act.
2. Application for waiver of pre-deposit and stay of recovery.
3. Determination of assessable value of goods manufactured and sold by appellants.
4. Allegations of under-valuation, mutuality of interest, and financial hardships.
5. Consideration of financial statements and imposition of deposit for duty demanded.

Issue 1: Demand of duty and penalties
The Commissioner of Central Excise, Chennai, demanded duty and penalties from multiple appellants under the Central Excise Act for the period from 15-4-2000 to 31-3-2002. The demand was based on alleged violations and non-payment of appropriate duty amounts by the appellants in relation to the goods manufactured and sold.

Issue 2: Application for waiver
The appellants filed applications seeking waiver of pre-deposit and stay of recovery concerning the duty and penalty amounts imposed on them. The applications were made due to financial hardships faced by the appellants, as argued by their legal representatives.

Issue 3: Determination of assessable value
The learned Commissioners found a 'mutuality of interest' between the appellants and another company, leading to the refusal to accept the price contracted between them as the basis for determining the assessable value of the goods. The assessable value was determined based on the sale price at which the goods were sold by the appellants to the other company, resulting in a demand for differential duty amounts.

Issue 4: Allegations and findings
Various financial transactions and agreements between the appellants and related parties were scrutinized. The findings included considerations such as non-compete fees, share transfers, use of factory premises, purchase of assets, and trade mark agreements. The Tribunal analyzed these factors to assess their impact on the determination of assessable value and duty liabilities.

Issue 5: Imposition of deposit
Considering the arguments presented and the financial statements of the appellants showing accumulated losses, the Tribunal decided that a deposit of 10% of the duty demanded should be made by the appellants. Compliance with this deposit requirement would result in a waiver of pre-deposit and stay of recovery for the remaining duty amounts and penalties imposed.
This detailed analysis covers the key issues addressed in the legal judgment, providing a comprehensive overview of the case and the Tribunal's decision-making process.